M/S. Poothundu Plantations Pvt. Ltd v. Agricultural Income Tax Officer, Chittoor, Kerala State And Ors

MiS. POOTHUNDU PLANTATIONS PVT. LTD. v. AGRICULTURAL INCOME TAX OFFICER, CHITTOOR, KERALA STATE AND ORS. JULY 15, 1996 [B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.] Kerala Agiicultural Income Tax Act 1950/lndian Income-tax Ace; 1922 Ss. 12, 36/s.24-Rectificatio11 of mistake-Held, only an apparent en-or of fact or law ca11 be rectified-Mistake pwp01ted to have occwred by construing the words of a section, cannot nonnally, be a rectifiable en·or u/s. 36-Constming the meaning of a section contrmy to the meaning given by Supreme Cowt is an en-or apparent on the record-Section 12 of Kera/a Act and S. 24 of Central Act are not identi~al and the judginent of Supreme Court D inte1preting s. 24 of Central Act cannot be applied straightaway to inte1pret s. 12 of Kera/a Act. Tbe appellant-assessee was assessed under the Kerala Agricultural Income Tax Act. Later another Agricultural Income Tax Officer, exercising E the power under s. 36 of the Act, rectified the order passed by his predeces-sor on the ground that in view of the interpretation of s. 24 of Indian Income Tax Act, 1922, given by this Court*, his predecessor wrongly construed the provisions of s. 12 of the Act and thereby committed an apparent error of law in computation of agricultural income tax. The High F Court also decided against the assessee. Aggrieved the assessee filed the appeal. Allowing the appeal, this Court HELD : 1. Only an apparent error of fact or law can be rectified by G an officer exercising the power under s. 36 of the Kerala Agricultural Income Tax Act, 1950. JI' the mistake of law has to be established by consiruing"the words of a section to find its proper meaning, then such an error cannot norn1ally be a rectifiable error under s. 36. If two views are possible, then obviously the error will not be an error apparent from the record. (569-F] H SUPREME COURT REPORTS [1996] SUPP. 3S.C.R. 2.1. ff the Supreme Court has construed the meaning of a section, then any decision to the contrary given by any other authority must be held to be erroneous and such error mu!'lt be treated as an error apparent on the record. [569-G] 2.2. Section 24 of Indian lucome Tax Act, 1922 and Section 12 of the B Kerala Agricultural Income Tax Act are not identically worded. Even if it can be established by a long process of reasoning that the meaning of the two sections is the same, the alleged mistake committed by the Agricultural Income Tax Officer cannot be treated as a mistake apparent on the record. ff any error had at all been committed by the Agricultural Income Tax Officer, it was not an error apparent on the record. The judgment of the Supreme Court explaining the provision of Section 24 of the Indian Income Tax Act, 1922 cannot be applied straightaway to interpret Section 12 of the Kerala Agricultural Income Tax Act. [570-D; 571-B] Anglo-French Textile Company Ltd. v. Commissioner of Income Tax, Madras, (1953) 23 ITR 82, held inapplicable. 3. The judgment and order passed by the High Court and the order of rectification passed by the Assistant Appellate Commissioner are set E aside. [571-D] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9168 of 1996. From the Judgment and Order dated 8.10.93 of the Kerala High F Court in O.P. No. 8575 of 1984-J. Joseph Vellappally and M.P. Vinod for the Appellant. G. Prakash for the Respondents. The Judgment of the Court was delivered by SEN, J. Leave granted. This case arises out of an order of rectification of mistake apparent on the face of record under Section 36 of the Kerala Agricultural Income H Tax Act. The Section, as it stood at the material time, was as under : AGRICULTURAL INCOME TAX OFFICER, CHITTOOR, KERALA STATE AND ORS. "36.Rectificationofniisluke:(1)Theauthoritywhichpassedan A order onappeal or revision may at any time within three years from the date of suchBordCr passed by him on appeal or in revision, and the Agricultural Incomc TaxOfficer may at any time within ihree years from the date ofany assessmentor Wy Acer (Aholo frhRIcou aqry Hla uaa wnlaartas[CHA faoora At] 569 " 36, Oot WOMANS (1) CA POMP OMA A ANCA GA ASI BUCH ATTPAY CH BUA A ANacdoad OA Gla BMA ANS BCU Oifael calc forTACIT UCM CT CHING WAT PATO ATA See PY BAA olsprfas wld ArarFRO CHAS WTA aA fares Snera oils cares for FQCAA NCAT CT CHIANGANY, Old FATA ASS VyTa, waa, we, Words a fawewa capoCATCH MAS CT CHATS GT WONT PATS AAT AAs APR WACAT NCW CHATSPANNA QlAl Ola VACA DTA CHING Wel WOMAAT PALO AlCATS IZ PTA WAPAPS AY BT CA, CHAT PTA BTA BACT 12 Ae MAP WersiedSTAT PCA YA BIC AH Pal Bcafaet 42 fofeto crs PAY Arayawispfas ola ASA POP AVS GBC WOMEN PACS AACA fe ATI 12Te Malo Meera BUCH AAA fBeTs "12. SBPHOTH SAACH FATA ASAMs (2) CAPT] CHIT Ihe CHT JACA HP BCACHCA CTPACAT WYN BA, COUPCA CUPHIA AAAS Jaca MACH WSN RCJae CAS Falad SA GCAA AAAS GM Pal ACAI AAs UM Ol HAVA GATPal A VT, Bl VT AVS GM A VIM Cmca AAT AAT! Sad ACTTWSA BCI, PS CPT CMPHTA BA AQCAT CAT WNC HAS TAN Pal ACA ATI "36. Rectification of mistake : (1) The authority which passed an A order on appeal or revision may at any time within three years from the date of such order passed by him on appeal or i.n revision, and the Agricultural Income Tax Officer may at any time within three years from the date of any assessment or refund order passed by him, of his own motion, rectify any mistake apparent from the B record of the appeal, revision, assessment or refund, as the case may be, and shall within the like period rectify any such mistake which has been brought to his notice by an assessee : The short question in this case is whether an Agricultural Income Tax Officer can rectify the order passed by his predecessor in office, on the ground that the assessment order was passed by wrongly construing Section 12 of the Kerala Agricultural Income Tax Act. Section 12 before its amendment stood as under : "12. Ca11ying f01ward of loss : where any person sustains a loss in agricultural income in any year the Joss shall be carried forward to the following year and set off against the agricultural income for-that year and if it cannot be wholly so set off, the amount of loss not so set off, shall be carried forward to the following year and so on, but no loss shall be carried forward for more than six years." There can be no doubt that only an apparent error of fact or law can be rectified by an officer. If the mistake of law has to be established by construing the words of a section to find its proper meaning, then such an F error cannot normally be a rectifiable error under Section 36. If two views are possible, then obviously the error will not be an error apparent from the record. It is, however, well-settled that if the Supreme Court has construed G the meaning of a section, then any decision to the contrary given by any other authority must be held to be erroneous and such error must be treated as an error apparent on the record. In the instant case, on the strength of the decisions of this Court in ·the case of Anglo-French Textile Company Ltd. v. Commissioner of Income H 570 A Tax Madras, (1953) 23 !TR 82, the Assistant Appellate Commissioner took the view that his predecessor had committed an apparent error of law in allowing carry forward of losses in the computation of agricultural income tax under the Kerala Agricultural Income Tax Act. The question is whether Section 12 of the Kerala Agricultural Income Tax Act must be interpreted B in the manner in which this Court has interpreted Section 24 of the Indian Income Tax Act. This is not an easy question to answer. In fact, the learned Single Judge before whom this question was raised in the writ petition before the Kerala High Court referred the question to a larger Bench for decision. This very fact goes to show that this was not a rectifiable.error apparent on the record of the case. The learned Single Judge of the Kerala C High Court felt that the question should be examined by a larger Bench. Moreover, Section 24 of the Indian Income Tax Act and Section 12 of the Kerala agricultural Income Tax Act are not identically worded. Even if it can be established by a long process of reasoning that the ll)eaning of D the two sections is the same, the alleged mistake committed by the Agricul-tural Income Tax Officer cannot be treated as a mistake apparent on the record. refund order passed by him, of his o\vn motion, rectify any mistake apparent fromthe record of the appeal, revision, assessment or refund, as the case maybe,andshallwithinthelikeperiodrectifyanysuchmistake \vhichhasbeenbroughttohisnoticebyanassessee: "12. Carrying forward of loss : where any person sustains a loss inagricultural income in any year the loss shall be carried forward to thefollowing year and set off against the agricultural income for•that year andif it cannot be wholly so set off, the amoant of oss not so set off, shall becarried forward to the following year E nd so on, but no loss shall becarried forward for more than six years."